Currency Exchange UK

 

Sterling struggles against Euro

Sterling struggles against Euro

Despite healthy economic data being released in the country, the Sterling fell against the Euro in early trading on Monday. 

The currency level was close to its lowest point against the Euro in over a month and signalled that the recovery in Britain is not set to be smooth.

The reason for the Sterling’s poor performance has been linked to strong data coming from the Eurozone – last week indices showed strong purchase management levels. 

In the UK, the fact that the Bank of England is to increase its quantitative easing programme is seen as a reason for the pound to be low on seller’s lists in the short term.

Another element adding to the pressure for the pound is the fact that the Bank plans to keep the base interest rate at its current low rate while in Europe the recovery looks more stable.

Interestingly, while the Bank’s policy is seen as much more hardline than other central banks’, there is evidence to show that they are working to help the recovery.

The EUR/GBP pair is showing evidence of “major resistance” according to currency strategists.  If it manages to climb above 87 pence it will reach its highest level since the beginning of June.  Right now it is around 86.75 pence.